Search

We compared patient outcomes before and after the introduction of the diagnosis related groups (DRG)-based prospective payment system (PPS) in a nationally representative sample of 14,012 Medicare patients hospitalized in 1981 through 1982 and 1985 through 1986 with one of five diseases. For the five diseases combined; length of stay dropped 24% and in-hospital mortality declined from 16.1% to 12.6% after the PPS was introduced (P less than .05). Thirty-day mortality adjusted for sickness at admission was 1.1% lower than before (16.5% pre-PPS, 15.4% post-PPS; P less than .05), and 180-day adjusted mortality was essentially unchanged at 29.6% pre-vs 29.0% post-PPS (P less than .05). For patients admitted to the hospital from home, 4% more patients were not discharged home post-PPS than pre-PPS (P less than .05), and an additional 1% of patients had prolonged nursing home stays (P less than .05). The introduction of the PPS was not associated with a worsening of outcome for hospitalized Medicare patients. However, because our post-PPS data are from 1985 and 1986, we recommend that clinical monitoring be maintained to ensure that changes in prospective payment do not negatively affect patient outcome. [ABSTRACT FROM AUTHOR]

We estimate the lifetime, discounted costs that smokers and drinkers impose on others through collectively financed health insurance, pensions, disability insurance, group life insurance, fires, motor-vehicle accidents, and the criminal justice system. Although nonsmokers subsidize smokers' medical care and group life insurance, smokers subsidize nonsmokers' pensions and nursing home payments. On balance, smokers probably pay their way at the current level of excise taxes on cigarettes; but one may, nonetheless, wish to raise those taxes to reduce the number of adolescent smokers. In contrast, drinkers do not pay their way: current excise taxes on alcohol cover only about half the costs imposed on others. [ABSTRACT FROM AUTHOR]

In a previous comparison of persons between 14 and 62 years of age randomly assigned to receive care through a fee-for-service system (n = 784) or through a health maintenance organization (HMO) (n = 738) in Seattle, Washington, persons in the HMO had much lower hospital expenditures and admissions, more bed days, a higher prevalence of serious symptoms, and less satisfaction with care. We report an examination of 20 additional health status measures. Our results are consistent with a hypothesis of no differences in health status measures between the two systems. In addition, a comparison of nine health practices between the systems also indicated no overall differences. Most physiologic measures and health practices for a typical person were not affected by care received through the fee-for-service system or the HMO. However, we are less certain of this result in specific subgroups, such as persons of lower income initially at elevated risk, because confidence intervals are necessarily wider. We conclude that the cost savings achieved by this HMO through lower hospitalization rates were not reflected in lower levels of health status. [ABSTRACT FROM AUTHOR]

In this series we have described changes in the quality of care that have occurred in the treatment of hospitalized elderly Medicare patients with one of five conditions between 1981-1982 and 1985-1986. In this article we report on a mortality analysis, patient and hospital subgroup comparisons, and time series studies we have conducted in an attempt to determine whether changes in quality of care can be linked causally to the introduction of the prospective payment system. Based on these analyses we conclude that (1) mortality following hospitalization has been unaffected by the introduction of the prospective payment system, and improvements in in-hospital processes of care that began prior to the prospective payment system have continued after its introduction, but (2) the prospective payment system has increased the likelihood that a patient will be discharged home in an unstable condition. We recommend that efforts to correct this problem be intensified and that clinical monitoring of the impact of the prospective payment system continue as hospital cost-containment pressures intensify. [ABSTRACT FROM AUTHOR]

We developed explicit process criteria and scales for Medicare patients hospitalized with congestive heart failure, myocardial infarction, pneumonia, cerebrovascular accident, and hip fracture. We applied the process scales to a nationally representative sample of 14,012 patients hospitalized before and after the implementation of the diagnosis related group-based prospective payment system. For the four medical diseases, a better process of care resulted in lower mortality rates 30 days after admission. Patients in the upper quartile of process scores had a 30-day mortality rate 5% lower than that of patients in the lower quartile. The process of care improved after the introduction of the prospective payment system; eg, better nursing care after the introduction of the prospective payment system was associated with an expected decrease in 30-day mortality rates in pneumonia patients of 0.8 percentage points, and better physician cognitive performance was associated with an expected decrease in 30-day mortality rates of 0.4 percentage points. Overall, process improvements across all four medical conditions were associated with a 1 percentage point reduction in 30-day mortality rates after the introduction of the prospective payment system. [ABSTRACT FROM AUTHOR]

We have conducted a nationally representative before-after study of the effects of the diagnosis related groups-based prospective payment system (PPS) on quality of in-hospital care for aged Medicare patients. We used a pre-post design with multiple time points in both the pre-PPS (calendar years 1981 and 1982) and post-PPS (July 1985 through June 1986) periods. We gathered clinically detailed data from medical records of patients with one of six diseases and supplemented these data with postdischarge information from Health Care Financing Administration files. We used a stratified multistage cluster sampling design with data gathered on 16,758 patients chosen from 297 hospitals in 30 areas in five states. Our hospital participation rate was 97%; we successfully accessed 96% of the medical records we requested; and our mean item-level reliability score was 0.80. Our sample matches the nation closely on hospital urbanicity, size, teaching status, ownership, and percentages of Medicare and Medicaid patients, and patient demographics and mortality. [ABSTRACT FROM AUTHOR]

Workers under 50 on average will spend 10-20% of their future hours working. So, assuming they value leisure time at the wage rate, the value of their lives is 5-10 times their future lifetime earnings. This value is close to values of life estimated by compensating wage differentials or willingness to pay. [ABSTRACT FROM AUTHOR]

In 1985, we began a 4-year evaluation of the effects of the diagnosis related groups-based prospective payment system on quality of care for hospitalized Medicare patients. This article provides an overview of the study's background, aims, design, and methods. We used a clinically detailed review of the medical record supplemented by data on postdischarge outcomes drawn from the files of the Health Care Financing Administration and fiscal intermediaries to (1) compare outcomes of care after adjustment for sickness at admission, (2) assess the process of in-hospital care and relationships between processes and outcomes, and (3) assess status at discharge for a nationally representative sample of patients hospitalized before and after prospective payment was implemented. [ABSTRACT FROM AUTHOR]

Flat capitation (uniform prospective payments) makes enrolling healthy enrollees profitable to health plans. Plans with relatively generous benefits may attract the sick and fail through a premium spiral. We simulate a model of idealized managed competition to explore the effect on market performance of alternatives to flat capitation such as severity-adjusted capitation and reduced supply-side cost-sharing. In our model flat capitation causes severe market problems. Severity adjustment and to a lesser extent reduced supply-side cost-sharing improve market performance, but outcomes are efficient only in cases in which people bear the marginal costs of their choices. [ABSTRACT FROM AUTHOR]

Objective: To evaluate whether adjusting the Health Plan Employer Data and Information Set (HEDIS) low birth weight (LBW) measure for maternal risk factors is feasible and improves its validity as a quality indicator., Data Source: The Washington State Birth Event Record Data for calendar years 1989 and 1990, including birth certificate data matched with mothers' and infants' hospital discharge records, with 5,837 records of singlet on infants identified as LBW (< 2,500 g) and a 25 percent sample ( n = 31,570) of the normal-weight births (

Objective: To simulate whether allowing small businesses to offer employer-funded medical savings accounts (MSAs) would change the amount or type of insurance coverage., Study Setting: Economic policy evaluation using a national probability sample of nonelderly non-institutionalized Americans from the 1993 Current Population Survey (CPS)., Study Design: We used a behavioral simulation model to predict the effect of MSAs on the insurance choices of employees of small businesses (and their families). The model predicts spending by each family in a FFS plan, an HMO plan, an MSA, and no insurance. These predictions allow us to compute community-rated premiums for each plan, but with firm-specific load fees. Within each firm, employees then evaluate each option, and the firm decides whether to offer insurance-and what type-based on these evaluations. If firms offer insurance, we consider two scenarios: (1) all workers elect coverage; and (2) workers can decline the coverage in return for a wage increase., Principal Findings: In the long run, under simulated conditions, tax-advantaged MSAs could attract 56 percent of all employees offered a plan by small businesses. However, the fraction of small-business employees offered insurance increases only from 41 percent to 43 percent when MSAs become an option. Many employees now signing up for a FFS plan would switch to MSAs if they were universally available., Conclusions: Our simulations suggest that MSAs will provide a limited impetus to businesses that do not currently cover insurance. However, MSAs could be desirable to workers in firms that already offer HMOs or standard FFS plans. As a result, expanding MSA availability could make it a major form of insurance for covered workers in small businesses. Overall welfare would increase slightly.

The authors discuss a system that describes the resources needed to treat different subgroups of the population under age 65, based on burden of disease. It is based on 173 conditions, each with up to 3 severity levels, and contains models that combine prospective diagnoses with retrospectively determined elements. We used data from four different payers and standardized the cost of most services. Analyses showed that the models are replicable, are reasonably accurate, explain costs across payers, and reduce rewards for biased selection. A prospective model with additional payments for birth episodes and for serious problems in newborns would be an effective risk adjuster for Medicaid programs.

Has the nature of hospital competition changed from a medical arms race in which hospitals compete for patients by offering their doctors high quality services to a price war for the patients of payors? This paper uses time-series cross-sectional methods on California hospital discharge data from 1986-1994 to show the association of hospital prices with measures of market concentration changed steadily over this period, with prices now higher in less competitive areas, even for non-profit hospitals. Regression results are used to simulate the price impact of hypothetical hospital mergers.

Objectives: (1) To describe the issues in developing a clinical predictor of cesarean delivery that could be used to adjust reported cesarean rates for case mix, and (2) to compare its performance to other, simpler predictors using clinical and statistical criteria., Data Sources: Singleton births greater than 2,500 grams in Washington State in 1989 and 1990 for whom mothers and infant hospital discharge records could be matched to birth certificate data., Design: Statistical analysis of retrospective merged hospital and birth certificate data, which were used to develop variables and models to predict the probability that any particular delivery would be a cesarean., Principal Findings: Merged data led to better predictor variables than those based on one source. A simple four-category hierarchical classification into births with prior cesarean, breech but no prior cesarean, first birth, and other explains 30 percent of the variance in individual cesarean rates. The full clinical model fit the data well and explained 37 percent of the variance. Multiparas without serious complications comprised 35 percent of the mothers and averaged less than 2 percent cesareans. A hospital's predicted cesarean rate depends strongly on the proportion of its births that are first births., Conclusion: Government and private agencies have reported cesarean rates as measures of hospital performance. Depending on data and resources available, both simple and complex measures of case mix can be used to adjust reported rates. These adjustments should not include all variables related to the rates. Proper adjustments may not alter hospital rankings greatly, but they will improve the validity and acceptability of the reports.

Purpose: This study examined the validity of medical-record-based nursing assessment and monitoring of signs and symptoms (nursing surveillance) in predicting patients who were admitted to ICUs and those admitted to non-ICUs. The association of this assessment and monitoring with differences in an intermediate patient outcome, instability at discharge, was also explored. Patients admitted to either setting with a diagnosis of acute myocardial infarction, cerebrovascular accident, congestive heart failure, or pneumonia, were included in the study., Method: A secondary analysis was carried out using a subset of data originally collected for a quality-of-care study. Data from the medical records of 11,246 patients (52% female, 48% male) with a mean age of 76.4 years were used in the present study., Results: ICU patients (n = 3969) were found to have a longer length of stay and to be sicker on admission than non-ICU patients (n = 7277). Overall, patients in the ICU received significantly higher nursing assessment and monitoring of signs and symptoms scores than non-ICU patients. Nursing assessment and monitoring of signs and symptoms scores were lower for patients discharged with greater instability for three of the four diseases (cerebrovascular accidents, congestive heart failure, and pneumonia).

Objective: To use meta-analysis to evaluate the effect of epidural analgesia on the cesarean delivery rate., Data Sources: The MEDLINE data base was searched for articles published in English between January 1981 and April 1992. We also interviewed experts and conducted a bibliographic follow-up and manual review of recent journals published from April to July 1992., Methods of Study Selection: We excluded articles with irrelevant titles, and those case studies, book chapters, or articles that did not provide primary and relevant data. Two hundred thirty articles were read, including articles that reported on women of standard obstetric risk and on cesarean delivery rates for an epidural group and for a concurrent no-epidural group. These criteria yielded six studies for a primary analysis and two others for a secondary analysis., Data Extraction and Synthesis: The sample size of the epidural and no-epidural groups and the number of cesareans within each group were extracted. Tests of homogeneity were conducted. The pooled cesarean delivery risk difference as a result of epidural analgesia was estimated. The cesarean rate for women undergoing epidural analgesia was ten percentage points greater than for no-epidural women (P < .05). More than a nine percentage point increase was shown for cesarean deliveries for dystocia (P < .05), when pooling either all studies or only randomized studies., Conclusions: The results of this meta-analysis strongly support an increase in cesarean delivery associated with epidural analgesia. Further research should evaluate the balance between analgesia associated with the use of epidurals, and postpartum morbidity and costs associated with cesarean deliveries.

Objective: To analyze whether elderly patients who are black or from poor neighborhoods receive worse hospital care than other patients, taking account of hospital effects and using validated measures of quality of care., Design: We compare quality of care provided to insured, hospitalized Medicare patients who are black or live in poor neighborhoods as compared with others, using simple and multivariable comparisons of clinically detailed measures of sickness at admission, quality, and outcomes., Setting: Two hundred ninety-seven acute care hospitals in 30 areas within five states., Patients or Other Participants: The sample includes a nationally representative sample of 9932 patients 65 years of age or older who lived at home prior to hospitalization for congestive heart failure, acute myocardial infarction, pneumonia, or stroke., Interventions: This was an observational study., Main Outcome Measures: Processes of care, length of stay, instability at discharge, discharge destination, and mortality., Results: Within rural, urban nonteaching, and urban teaching hospitals, patients who are black or from poor neighborhoods have worse processes of care and greater instability at discharge than other patients (P < .05). However, this worse quality is offset by patients who are black or from poor neighborhoods being 1.8 times more likely to receive care in urban teaching hospitals that have been shown to provide better quality of care (P < .001). Because these patients receive more of their care in better-quality hospitals, there are no overall differences in quality by race and poverty status. Death rates did not vary by race or poverty status., Conclusions: Quality of hospital care for insured Medicare patients in influenced both by the patient's race and financial characteristics and by the hospital type in which the patient receives care.

Few capitation arrangements vary premiums by a child's health characteristics, yielding an incentive to discriminate against children with predictably high expenditures from chronic diseases. In this article, we explore risk adjusters for the 35 percent of the variance in annual out-patient expenditure we find to be potentially predictable. Demographic factors such as age and gender only explain 5 percent of such variance; health status measures explain 25 percent, prior use and health status measures together explain 65 to 70 percent. The profit from risk selection falls less than proportionately with improved ability to adjust for risk. Partial capitation rates may be necessary to mitigate skimming and dumping.

The dramatic rise in cesarean-section (C-section) rates, and their high costs and wide variation, has raised interest in understanding the factors affecting decisions to use this procedure. The economic incentives of physicians, hospitals, payers, and mothers are examined. In the economic framework, physicians must balance their short-term interests against their reputation, which is derived from efficiently providing what mothers want. Providers who encounter higher opportunity costs while attending to mothers in prolonged labor can reduce these costs by operating or by restructuring their practices. The mainly indirect evidence on financial incentives indicates that insured mothers have low marginal financial costs when they undergo C-section. Mothers with private, fee-for-service insurance have higher C-section rates than mothers who are covered by staff-model HMOs, who are uninsured, or who are publicly insured. In conclusion, research and payment reforms to reduce distortions to good practice are proposed.

Consumers, payers, and policymakers are demanding to know more about the quality of the services they are purchasing or might purchase. The information provided, however, is often driven by data availability rather than by epidemiologic and clinical considerations. In this article, we present an approach for selecting topics for measuring technical quality of care, based on the expected impact on health of improved quality. This approach employs data or estimates on disease burden, efficacy of available treatments, and the current quality of care being provided. We use this model to select measures that could be used to measure the quality of care in health plans, but the proposed framework could also be used to select quality of care measures for other purposes or in other contexts (for example, to select measures for hospitals). Given the limited resources available for quality assessment and the policy consequences of better information on provider quality, priorities for assessment efforts should focus on those areas where better quality translates into improved health.

Objective: To analyze whether important gender differences exist in the quality of hospital care provided to patients with four major medical conditions., Design: Bivariate and multivariate comparisons of clinically detailed sickness at admission, quality, utilization, and outcome measures., Setting: Acute care hospitals located in five states., Patients or Other Participants: A total of 11,242 patients 65 years or older who were hospitalized with one of four diseases: congestive heart failure, acute myocardial infarction, pneumonia, and cerebrovascular accident. We derived our data from the nationally representative sample used to study the quality of hospital care for Medicare patients before and after the implementation of the prospective payment system. A hierarchical (nested) cluster sampling design was used to draw disease-specific samples of patients hospitalized in 1981, 1982, 1985, or 1986 in one of 297 hospitals located in 30 areas within five states., Interventions: This was an observational study., Main Outcome Measures: Sickness at admission, process, use rates, length of stay, discharge status, discharge destination, and mortality., Results: Sex differences in sickness at admission varied by disease. There was some evidence that women received worse process of care, but the difference was very small. We found many similarities in the process and outcomes of care for male and female patients., Conclusions: After controlling for sickness at admission, age, and other important covariates, the in-hospital experiences of elderly men and women showed greater similarities than differences. The concern that sex bias enters into clinical decision making during hospitalization is eased, although not entirely eliminated.

Mortality prediction models hold substantial promise as tools for patient management, quality assessment, and, perhaps, health care resource allocation planning. Yet relatively little is known about the predictive validity of these models. We report here a comparison of the cross-validation performance of seven statistical models of patient mortality: (1) ordinary-least-squares (OLS) regression predicting 0/1 death status six months after admission; (2) logistic regression; (3) Cox regression; (4-6) three unit-weight models derived from the logistic regression, and (7) a recursive partitioning classification technique (CART). We calculated the following performance statistics for each model in both a learning and test sample of patients, all of whom were drawn from a nationally representative sample of 2558 Medicare patients with acute myocardial infarction: overall accuracy in predicting six-month mortality, sensitivity and specificity rates, positive and negative predictive values, and per cent improvement in accuracy rates and error rates over model-free predictions (i.e., predictions that make no use of available independent variables). We developed ROC curves based on logistic regression, the best unit-weight model, the single best predictor variable, and a series of CART models generated by varying the misclassification cost specifications. In our sample, the models reduced model-free error rates at the patient level by 8-22 per cent in the test sample. We found that the performance of the logistic regression models was marginally superior to that of other models. The areas under the ROC curves for the best models ranged from 0.61 to 0.63. Overall predictive accuracy for the best models may be adequate to support activities such as quality assessment that involve aggregating over large groups of patients, but the extent to which these models may be appropriately applied to patient-level resource allocation planning is less clear.

In this report the data from medical history questionnaires, screening examinations, insurance claims, and a face-to-face physician interview were used to examine the quality of ambulatory care received for 17 chronic conditions by a general population of 5986 adults (less than or equal to 65) and children (less than or equal to 14) enrolled in the RAND Health Insurance Experiment. Subjects in six U.S. sites were randomly assigned to insurance plans that were free or that required cost sharing, or in one site to an HMO. Quality-of-care criteria--both process (what was done to patients) and outcome (what happened to them)--were developed. Overall, 81% of outcome criteria and 62% of process criteria were met. Physicians interviewed patients with selected conditions at the Experiment's end to evaluate care. They suggested that approximately 70% of patients should have their current therapy changed, but only 30% of patients would obtain more than minor improvement from such a change. Clinically meaningful plan differences in quality of care were observed only for the process criteria dealing with the need for a visit (free plan compliance 59%; cost sharing compliance 52%). Quality of care for the poor was slightly worse than for the nonpoor and persons randomized to an HMO had slightly better overall quality of care than those in the fee-for-service system. Substantial improvements in the quality of the process of care could be made, but impact on outcome may be small. Results of the analysis suggest the need for development of clinical models to test the relationship between specific process criteria and improvements in outcome.

Several analysts have proposed adding adjusters based on health status and prior utilization to the adjusted average per capita cost formula. The authors estimate how well such adjusters predict annual medical expenditures among non-elderly adults. Both measures substantially improve on the variables currently used. If only health measures are added, 20-30 percent of the predictable variance is explained; if only prior use is added, more than 40 percent is explained; if both are added, about 60 percent is explained. The results support including some measure of use in the formula until better health measures are developed.